The "Governing Law and Jurisdiction" clause specifies which region's legal framework will be applied in interpreting and enforcing the terms of a contract and designates the location where any legal disputes will be resolved. This clause is crucial for determining procedural and substantive legal matters, ensuring both parties are aware of the legal standards and courts that will have authority in case of conflicts.
What is Governing Law and Jurisdiction?
Governing Law and Jurisdiction are critical elements of a contract that define the legal framework under which the agreement will be interpreted and which courts will resolve any disputes. Essentially, this clause dictates which country’s or state’s laws will apply (the governing law) and where any legal proceedings (jurisdiction) will take place. Including a clear law and jurisdiction clause is essential to avoid ambiguity and ensure both parties understand the legal standards that will govern their relationship.
When should I use Governing Law and Jurisdiction?
A Governing Law and Jurisdiction clause should be included in any contract involving parties from different jurisdictions or when the contract spans multiple legal territories. This is particularly important when dealing with cross-border agreements, as different countries may have vastly different legal systems. Specifying that the contract shall be governed by the laws of England or another jurisdiction, for example, provides certainty and can prevent costly legal disputes. It’s a way of establishing clarity on which legal system will apply, especially if the England and Wales law clause is commonly used in international agreements.
How do I write Governing Law and Jurisdiction?
A typical Governing Law and Jurisdiction clause should specify the chosen legal system and the venue for any disputes. Here’s an example of how to write this clause:
Governing Law and Jurisdiction: This Agreement shall be governed by, and construed in accordance with, the laws of [Specified Jurisdiction], without regard to its conflict of laws principles. Any disputes arising out of or in connection with this Agreement shall be submitted to the exclusive jurisdiction of the courts of [Specified Venue].
This format is widely used in contracts to ensure that both the governing law and the jurisdiction are explicitly agreed upon by all parties.
What does “Shall be Governed by the Laws of England” Mean?
The phrase “this contract shall be governed by the laws of England” is commonly found in international contracts to ensure that the agreement adheres to English law. This clause clarifies that, regardless of where the parties are located or where the business activities take place, English law will be the governing law for interpreting the contract. It’s an effective way to bring consistency and predictability to agreements, especially in global commerce. English law is often chosen for its well-established legal system and robust contract law precedents.
What is the England and Wales Law Clause?
An England and Wales law clause is a type of Governing Law and Jurisdiction clause that specifies that the contract will be interpreted and enforced under the laws of England and Wales. This clause is commonly used in contracts involving parties from different countries, as the legal system in England and Wales is widely recognized for its transparency and fairness. By including an England and Wales law clause, the parties can ensure that any disputes will be resolved in a jurisdiction that both sides consider reputable and reliable.
For instance, a typical England and Wales law clause may state:
This Agreement shall be governed by, and construed in accordance with, the laws of England and Wales. Any disputes arising out of or in connection with this Agreement shall be submitted to the exclusive jurisdiction of the courts of England and Wales.
Which contracts typically contain Governing Law and Jurisdiction?
You’ll typically find a Governing Law and Jurisdiction clause in a variety of contracts, including:
- International Business Agreements: To define which country’s laws will govern the contract and which courts will hear disputes.
- Service Contracts: Especially important when dealing with parties from different legal jurisdictions, where specifying that the contract is governed by England and Wales law can offer reassurance to both parties.
- Sales Contracts: In cross-border transactions, clearly defining the governing law avoids uncertainty.
- Employment Contracts: Used to specify the legal framework that will govern any employment disputes.
- Licensing Agreements: To ensure the proper jurisdiction is established in intellectual property matters.
- Partnership Agreements: Provides a clear understanding of how disputes between partners will be resolved.
Including a well-drafted law and jurisdiction clause, such as one that specifies the agreement shall be governed by the laws of England, can help mitigate risks, create legal clarity, and ensure both parties know what to expect in the event of a dispute.